Increases to the Annual Gift Exclusion, Lifetime Gift Exclusion and Federal Estate Tax Exemption Amounts

Over the past decade, there have been significant changes to the federal tax laws concerning the estate and gift tax laws. The Tax Cuts & Jobs Act that was recently passed and enacted served to increase the lifetime exemption amounts under the estate tax and gift tax. For 2018, the applicable amounts are as follows:

• Estate Tax Exemption Amount for Single Persons: $11,200,000
• Estate Tax Exemption Amount for Married Couples: $22,400,000
• Lifetime Gift Exclusion per person: $11,200,000

For those persons who make annual gifts, the annual exclusion amount for gifts made in 2018 has also increased to $15,000 per recipient. A donor can make as many gifts as they like to multiple recipients in a calendar year, up to the $15,000 for each person.

If a person exceeds the $15,000 per donee limit, then a gift tax return is required to be filed. Gift tax will be payable by the donor unless they choose to utilize a part of their lifetime gift tax exclusion. If a portion of the lifetime gift tax exclusion is used, then the estate tax exemption amount that will be available at their death will be decreased by the same amount.

If you created your estate plan prior to 2011, these changes in applicable law might suggest that your plan be reviewed and possibly updated. If you would like to conduct a review of your documents, please contact Cripps & Simmons to schedule an appointment. Any one of our attorneys would be glad to meet with you to discuss your specific situation.